sshd[#]: [ID 800047 auth.error] error: Failed to allocate internet-domain X11 display socket

Check your $DISPLAY.

echo $DISPLAY

Should be like localhost:10.0

10 could be 11 12 13 etc

If you dont see that, check where $DISPLAY value comes from

grep DISPLAY ~/.*

try commented it out

if still not work try google somewhere else, u may find

1. plumb the ip6 localhost
2. use sshd -4 (edit /lib/svc/method/sshd for solaris 10)
3. Change ListenAddress in sshd_config from :: to 0.0.0.0

Hmm I dunno.. good luck